NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.

Estimating the Value of Utility- Scale Solar Technologies in 

California Under a 40% 

Renewable Portfolio Standard

(Report Summary)

Jennie Jorgenson, Paul 

Denholm, and Mark Mehos

June 2014

NREL/PR-6A20-62222
2

California’s Renewable Portfolio Standard

• CA currently has a 33% Renewable Portfolio 

Standard (RPS) for 2020, which means 33% of retail 

electricity sales must come from eligible renewable 

energy resources

• Governor Brown sees California’s RPS goal of 33% 

by 2020 as a floor, not a ceiling. 

• Within reasonable costs, the Governor has stated 

that 40% renewables is achievable in the near 

future*

• In this analysis, we compare the relative value of 

two utility-scale solar technologies (PV and 

Concentrating Solar Power with Thermal Energy 

Storage [CSP-TES]) under a 40% RPS scenario

*Source: Press release, April 12, 2011. Office of Governor Jerry Brown website, Source: Press release, April 12, 

2011. Office of Governor Jerry Brown website, http://gov.ca.gov/news.php?id=16974.
3

Analysis of California’s Electricity Sector

• The California Independent System Operator (CAISO) 

oversees CA’s bulk power system and energy market

• To analyze the originally proposed 33% RPS, they 

developed a database with generator-level detail for all 

of the Western US (CA historically imports a lot of power 

from neighboring regions)

• To reduce run-time, generators outside of CA are 

simplified, and don’t enforce integer “unit commitment” 

status and constraints

• The model enforces transmission limits between ~25 

regions (zones) in the Western U.S.
4

Analysis Goals

• To use the CAISO database as a foundation for 

understanding the operational value of utility-scale solar 

technologies in a scenario with relatively high existing 

solar penetration in the base 33% RPS scenario, and a 

higher 40% RPS environment 

• Determine the sensitivity of operational value to system 

assumptions:

o Configuration of CSP-TES plant

o Presence of existing energy storage

o Ability of CAISO to export energy

• Develop more robust capacity valuations for either solar 

technology
5

Analysis of California’s Electricity Sector at a 33% RPS

CAISO Munis Rest of the West

Peak Load (GW) 54.3 12.0 122.9

Annual Demand 

(TWh) 254 58.0 753

CA RPS Energy (TWh) 60.4 9.2 18.2

Other Wind and Solar 

Energy (TWh) 6.4 0 69.4

Annual Net Imports 

(TWh) 46.2 29.6 -75.8

Areas Served/

Balanced By

SCE, 

SDG&E

PG&E

LDWP, 

IID, TIDC, 

SMUD

Rest of the West (includes 

areas in CO, AZ, WY, NM, AZ, 

WA, OR, NV, ID, UT, MT, 

Alberta, and British Colombia)

Summary of modeled regions in the 

original 33% RPS database: 
6

Analysis of California’s Electricity Sector at a 33% RPS

Capacity Installed (MW)

Non RPS RPS

Biomass - 1,080

Coal 138 -

CSP - 1,400

Demand Response 2,730 -

Gas Combined-Cycle 17,900 -

Gas Combustion 

Turbine 7,430 -

Geothermal - 2,460

Hydropower 7,350 1,380

Nuclear 2,240 -

PV 2,080 9,950

Steam/Other 615 -

Storage 3,025 -

Wind - 10,400

Total 42,300 26,600

Summary of installed 

capacity in the CAISO 

region for the original 33% 

RPS database

Dispatch (generator output) stack for the 33% RPS 

case in CAISO in different seasons –

CAISO is almost always a net importer of energy
7

Adding Utility-Scale PV or CSP-TES to the original California 33% RPS

CSP is modeled as a modified storage plant, which gets energy inflow from the 

sun, and can: 1) send solar energy to thermal storage, 2) send solar energy to 

the power block to generate electricity, 3) a combination of both, or 4) draw 

energy from storage to generate electricity

Base case configuration has a solar multiple (SM) of 1.3, meaning that the solar 

field and receiver is over-sized to collect 1.3 times as much energy from the sun 

than it can generate in the power block, and 6 hours of thermal storage 
8

Adding Utility-Scale PV or CSP-TES to the original California 33% RPS

Marginal Operational Value in 33% RPS Case ($/MWh)

CSP-TES (SM = 1.3, 6 hrs TES) PV

Variable Operation and Maintenance Costs 

(VO&M) 1.6 1.2

Start-up and Shut-down 2.5 -0.9

Fuel 34.4 27.9

Emissions 8.1 3.7

Total 46.6 31.9

Avoided Fuel per Unit Energy (MMBTu/MWh)

CSP-TES (SM = 1.3, 6 hrs TES) PV

Biomass 0.2 0.5

Coal 0.3 0.9

Gas Combined Cycle 6.8 6.0

Gas Combustion Turbine 0.7 0.1

Total 7.9 7.5

Marginal operational value of either solar technology is calculated by attributing 

the savings in generation costs (from conventional thermal generators) to the 

new solar plant. This value comes from 4 categories:

Note: CO2 Emissions cost about $22/ton in database for CA generators

Avoided fossil fuels and biomass consumption by technology: 
9

Next: Creating a 40% RPS scenario in California

1) Start with CA’s 33% RPS database

2) Scale RPS up to 39%

o Due to many incentives within CA to promote distributed 

PV, we added 75% PV and 25% wind to existing locations 

to achieve this level first level of 39% RPS

3) Analyze a situation where CSP-TES provides the 

final 1% of RPS energy to reach a 40% RPS

4) or analyze a situation where utility-scale PV 

provides the final 1% of RPS energy 

5) Compare the value of the two

6) Test sensitivities to the relative value:

o Compare various configurations (SM and TES capacity) 

of CSP 

o Sensitivity to existing energy storage capacity

o Sensitivity to constricting exports from CA
10

2) Scaling CA RPS from 33% to 39%

Annual Generation from RPS sources in 

Two RPS scenarios

33% RPS 39% RPS (before remaining 1% PV or CSP 

is added)

Biomass 9,400 9,400

Geothermal 21,500 21,500

Small Hydropower 7,200 7,200

Wind 25,100 27,800

PV 21,200 29,300

CSP 3,400 3,400

Total RPS 87,500 98,600

Non-RPS PV 6,400 6,400

Total RE 94,200 105,000
11

2) Scaling CA RPS from 33% to 39%

Observed operational changes between the 33% and 39% cases

CAISO Munis WECC

Peak Load (GW) 54.3 12.0 122.9

Annual Demand (TWh) 

(% of total Western Interconnection)

254

(23.8%)

57.9

(5.4%)

754

(70.7%)

CA RPS Energy (TWh) 

(% of total CA RPS)

68.9

(69.8%)

10.1

(10.2%)

19.7

(20.0%)

Other Wind and Solar Energy (TWh) 6.4 0 69.4

Net Annual Imports (TWh) 41.2 29.8 -71.0

Incremental CA RPS Energy (TWh) 8.5 0.9 1.5

% of CA RPS Generation 

Displaced in Region (%) 32.7 11.5 55.8

Change in Imports (reduced 

imports, and increased exports)

Change in generation (much of displaced energy is 

outside of CA)
12

3-5) Add enough CSP-TES or PV to reach 40% RPS

Marginal Operational Value in 33% RPS Case ($/MWh)

CSP-TES (SM = 1.3, 6 hrs TES) PV

VO&M 1.5 1.2

Start-up and Shut-down 2.9 -0.4

Fuel 33.9 25.8

Emissions 7.9 3.2

Total 46.2 29.8

• CSP-TES is able to shift energy 

in time to displace more 

expensive fuels than PV

• CSP-TES and PV displace 

similar amounts of CO2 (484 

lbs/MWh for CSP, 507 lbs/MWh

for PV)

• But, CSP-TES displaces twice 

the emissions cost compared to 

PV since CO2 costs are only 

incurred inside CA, and CSPTES displaces mostly 

generation in CA (see left 

graph)
13

3-5) Add enough CSP-TES or PV to reach 40% RPS

• Graph above shows net imports for an average day in 3 seasons into 

CAISO

• 39% RPS results in a severe dip in imports during the middle of the day

• Adding PV makes this dip noticeably worse compared to adding CSPTES

• CSP-TES also decreases the evening peak – an important source of 

value for CSP-TES

• Overall, CSP shows an additional value of $16.4/MWh over PV in the 

33% RPS case, and $17.4/MWh additional value in the 40% RPS case
14

6) Sensitivities – Reduced Export Capabilities

• The implications of assuming that other regions can accept exported RPS 

energy from CAISO represents a large shift in current operations

• Two export restriction cases: capping net hourly exports from CAISO at 

1500-MW and 0-MW

• Comparing the marginal operational value of either technology to the value 

in the base case (with no restrictions on exports other than transmission 

capacity):

Base Case (no export restriction) 1,500-MW Export Limit 0-MW Export Limit

Marginal 

Operational

Value ($/MWh)

CSP-TES PV CSP-TES PV CSP-TES PV

VO&M 1.5 1.2 1.6 1.2 1.3 0.9

Start-up and Shutdown 2.9 -0.4 3.4 -0.5 3.5 -0.4

Fuel 33.9 25.8 34.6 26.2 35.1 21.6

Emissions 7.9 3.2 8.3 2.8 6.7 1.3

Total 46.2 29.8 47.1 29.7 46.2 28.5

• The relative value of CSP-TES over PV rises from $16.4/MWh in the 

base case (with unrestricted exports) to $17.4/MWh in the 1500-MW limit 

case, and $17.7/MWh in the 0-MW limit case

• Since the operational values in the table above are normalized by MWh

of uncurtailed energy, the value of PV drops slightly as more PV must be 

curtailed, since its not able to be exported
15

6) Sensitivities – Existing Energy Storage Capacity

• The results presented up to this point contain an assumed an additional ~1200-MW of 

energy storage, in accordance with Rulemaking R.10-12-007 in CA which establishes 

energy storage procurement targets

• This 1200-MW of storage is assumed (up to this point) to have a large storage capacity 

and the ability to provide ancillary services

• Sensitivities to storage capacity:

1) long-duration energy-shifting device with the ability to provide ancillary services 

(base case co-optimized device)

2) short-duration device with only the ability to provide ancillary services (no energy 

shifting)

3) remove the 1200-MW of mandated storage

• Again, compare the marginal value of CSP-TES and PV:

As CSP-TES can provide more services 

that are not being provided by the other 

storage devices, its value over PV rises

Relative Value of CSP-TES 

Compared to PV ($/MWh)

Co-optimized 

Storage (Base) 16.4

Short-Duration 

Storage 17.5

No Additional 

Storage 20.0
16

6) Sensitivities – CSP-TES Plant Configuration

• Varying the configuration (relative ratio of the solar field capacity and power block 

capacity) and thermal storage capacity of a CSP-TES plant affects the value it provides 

to the system

• Graph above shows a plant with SM = 2 (the solar field is 2x the size of the power block 

capacity)

• This sensitivity evaluates SMs between 1.3 and 2.7 with the thermal energy storage 

capacity varying between 0 and 15 hours of plant capacity:

Solar Multiple Rated Capacity 

of Plant (MW)

Electrical Equivalent Inflow 

from Field (GWh)

Hours of TES 

Capacity Tested

1.3 1,172 3,667 0, 3, 6

1.7 896 3,667 3, 6, 9

2 762 3,667 6, 9, 12

2.3 663 3,667 9, 12, 15

2.7 564 3,667 12, 15
17

6) Sensitivities – CSP-TES Plant Configuration

• Two trends in the above graph:

1) increasing value with higher storage capacity at each SM. This reduces the 

amount of solar energy that must be spilled by allowing more to be stored, and 

allowing the energy to be shifted to periods of higher-cost energy

2) value is higher for plants with lower SMs. Since power block size decreases 

as SM increases, plants with higher SMs are forced to store an increasing 

fraction of solar energy even during high-cost periods.
18

6) Sensitivities – CSP-TES Plant Configuration

More storage capacity 

gives the plant flexibility 

in when it generates 

energy – allowing the 

plant to generate during 

the highest-priced hours
19

6) Sensitivities – CSP-TES Plant Configuration

• Plants with smaller 

SMs may output more 

energy when prices 

are high

• Plants with higher SMs 

exhibit a “flatter” 

generation profile
20

6) Sensitivities – CSP-TES Plant Configuration

A combination of high thermal energy storage capacity and a smaller 

SM gives the CSP-TES plant more flexibility in scheduling its output 

(energy is labeled as dispatchable since there are less constraints on 

when it may be used)
21

Other sources of value for solar?

• So far, results indicate that CSP-TES has a higher marginal 

operational value than PV, and that the relative value may increase 

slightly with increased PV penetration

• Another source of potential value besides avoided operational costs: 

firm capacity

• “Capacity value” reflects the ability of PV or CSP to avoid the costs 

of building new conventional thermal generators to meet demand 

(only valid in systems which need capacity in response to growing 

energy demand or plant retirements)

• The actual capacity credit earned by either technology is not 

necessarily dependent on nameplate capacity, but on a metric which 

reflects the generator’s availability during periods of peak net 

demand, or its effective load-carrying capacity (ELCC)
22

Capacity value for solar technologies

• Using the Renewable Energy Probabilistic Resource Adequacy tool 

(REPRA) that conducts a full ELCC calculation for variable resources, 

the capacity credit for PV is calculated:

• In the 33% RPS case, PV gets a capacity credit of 22%

• In the 40% RPS case, PV gets a capacity credit of 3.4%

• The low capacity credit of PV in the 40% case may be the result of 

using only a single year of data or other uncertainties. For a high 

bound, we use previously reported values:

• 30% capacity credit in the 33% RPS case 

• 20% capacity credit in the 40% RPS case

• For CSP with TES, the ELCC calculation becomes complicated due 

to dispatchable storage. An approximation method uses plant output 

during the highest net load hours and the availability of stored energy 

during those hours. For CSP-TES with a SM of 1.3 and 6 hours of 

TES, this leads to:

• 92.8% capacity credit in the 33% RPS case

• 96.6% capacity credit in the 40% RPS case
23

Capacity value for solar technologies

• Applying the cost of a new combustion turbine in California ($150/kWy or $190/kW-y) to the effective capacity (capacity credit multiplied by 

nameplate capacity) leads to a range of capacity values in $/MWh

($/MWh) 33% RPS 

Lower Estimate Upper Estimate

PV 15.2 26.3

CSP-TES 47.9 60.8

($/MWh) 40% RPS

Lower Estimate Upper Estimate

PV 2.36 17.6

CSP-TES 49.8 63.1
24

Capacity value for solar technologies

($/MWh) 33% RPS

Lower Estimate Upper Estimate

PV 47.1 58.2

CSP-TES 94.6 107

($/MWh) 40% RPS

Lower Estimate Upper Estimate

PV 32.2 47.4

CSP-TES 96.0 109

• Adding the capacity values (previous slide) to the operational values 

from before, the total values for each technology become:
25

Capacity value for solar technologies

• Capacity credits for different configurations of CSP-TES in the 40% 

RPS case:

Capacity Credit Including 

Dispatch and Useable Storage

Hours of 

TES

SM

1.3 1.7 2 2.3 2.7

0 0.092

3 0.946 0.979

6 0.966 0.989 0.999

9 0.995 1.00 1.00

12 1.00 1.00 1.00

15 1.00 1.00

• All configurations of CSP with thermal storage exhibit very high capacity 

credit

• The capacity credit increases for plants with more storage, and with larger 

SMs
26

Capacity value for solar technologies

• Total Value (capacity + operational value) for different configurations 

of CSP-TES:

• Smaller SMs with storage show the highest total value

• Due largely to the higher assumed plant rating (see slide 16) and increased 

operational value
27

Conclusions

• The operational value in reduced generation costs for PV in a 33% 

RPS case is $31.9/MWh and is $46.6/MWh for CSP-TES

• The operational value for PV in a 40% RPS case is $29.8/MWh and 

$46.2/MWh for CSP-TES

• The operational value is sensitive to:

• The configuration of the CSP-TES plant. Plants with large SMs 

reduced the value of CSP because the plant produces more 

energy during periods of low value. Adding sufficient storage 

capacity increases the value of CSP. Note that plants with smaller 

SMs and more storage capacity may be more expensive to build, 

and this interaction requires future analysis.

• Export capacity of California. Reducing the export capacity of 

CAISO resulted in higher curtailment of PV, which slightly lowers 

its value to the system.

• Existing storage capacity. Eliminating an existing 1,200-MW of 

energy storage increases the flexibility benefits of CSP, giving it a 

higher value
28

Conclusions

• A significant portion of CSP value appears to be derived from its 

ability to provide firm system capacity. 

• The total value of CSP and PV (calculated as the sum of capacity 

and operational value) is:

• For PV in a 33% RPS: $47.1/MWh - $58.2/MWh

• For CSP in a 33% RPS: $94.6/MWh - $107/MWh

• For PV in a 40% RPS: $32.2/MWh – $47.4/MWh

• For CSP in a 40% RPS: $96.0/MWh - $109/MWh
29

Future Work

• More examination on the capacity value of 

PV and CSP, especially the interaction 

between the two

• System needs at shorter timescales (subhourly)

• Cost comparison of different configurations 

of CSP-TES plants
Learn more by downloading 

the full report: 

http://www.nrel.gov/docs/fy1

4osti/61685.pdf

Jorgenson, J.; Denholm, P.; Mehos, M. (2014). 

Estimating the Value of Utility-Scale Solar 

Technologies in California Under a 40% 

Renewable Portfolio Standard. NREL Report 

No. TP-6A20-61685.